AI Air Liquide SA

   (FROM THE WALL STREET JOURNAL 11/18/15) 
   By Maria Armental and Alison Sider 

France's Air Liquide SA agreed to pay $10.3 billion for U.S.-based Airgas Inc., which produces cylinders of gases used in manufacturing, food production, health care and to fill helium balloons.

Air Liquide, which makes large volumes of gases including hydrogen used for car-charging stations, highlighted the complementary businesses of the two companies, in a statement.

"This acquisition increases our geographic reach in the resilient U.S. market, and offers continuous growth opportunities," said Benoit Potier, chief executive of Air Liquide.

Under the deal's terms, Air Liquide would pay Airgas shareholders $143 a share. Airgas stock jumped more than 29% to $137.35 on Tuesday. The deal, unanimously approved by the companies' respective boards, is subject to regulatory and Airgas shareholders' approval.

Fabienne Lecorvaisier, the company's chief financial officer, said she anticipates a lengthy antitrust process, but expects to get approval for the deal without selling "anything really significant."

Industrial gas producers have been hurt by the strength of the U.S. dollar and slowing demand from heavy industry. In the past few years, many companies have moved away from the packaged and bottled gas business, which have a combined sales of $13 billion annually in the U.S.

Airgas bought the packaged gas businesses of two of the top players, Air Products and Chemicals Inc. and The Linde Group in 2002 and 2007, and now accounts for 25% of the market. Airgas says it is the biggest producer of nitrous oxide, used by dentists, in North America.

Air Liquide said it planned to refinance existing debt to help pay for the deal, and expects to see a boost to its earnings in the first year. The company carried about 7.93 billion euros in debt -- about $8.4 billion -- as of June 30.

Including debt, the deal is valued at $13.4 billion. Shares of Air Liquide rose 2.5% to 123.65 euros, near the 52-week-high of 123.95 euros set on Dec. 16. Airgas, which is based in Radnor, Pa., reported $5.3 billion in sales for year ended March 31.

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Bob Tita contributed to this article.

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November 18, 2015 02:48 ET (07:48 GMT)

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